Review of ProLine Tax Online Edition - 2011

Best Fit:

Small practices with generally less complex clients, primarily 1040-focused who need mobility

Strengths:

Web-based

No IT headaches

Inexpensive

Instant ramp-up/down

Any number of users

On-demand use

PC & Mac friendly

Potential Limitations:

Lack of integration with accounting programs

Paperless limited to PDF output

No client portals

No business management/billing functions

Last year’s introduction of ProLine Tax Online marked the first widely marketed totally web-based tax compliance system for professionals, but it was somewhat limited in its initial capabilities. Most notably, the TY 2009 version supported only a couple dozen states and was limited to 1040s. Since then, however, Intuit has continued to strongly develop the product, and for TY 2010 now supports forms 1040, 1065, 1120 and 1120S, associated extension forms, and all states, including multi-state filing functions. Also new for this year was the addition of greater multi-user access capabilities, data rollover and conversions.

Core Product Functions/Features

As noted above, ProLine Tax Online (PTO) supports individual, partnership, C-Corp and S-Corp returns, including all states with reporting for those entities. The system does not support estate and gift tax compliance benefit plan reporting (Form 5500) or local income tax compliance. Built from the ground up as a completely online solution, PTO uses a secure web browser interface, which allows the system to be used on PCs or Macs and from anywhere the user has an Internet connection. The program’s primary work screen organizes clients by business or individual, with the option to create, save and manage multiple returns per client. No client search or filter parameters are available aside from segregating business entity and individual returns.

Data entry is performed on input sheets/interview screens that provide topic-focused entry, guiding preparers through initial entry tasks, including multi-state income allocations, deductions, credits and other return areas. PTO’s work screens organize preparation into four primary categories, with tabs for Enter Data, Review Data, Check Results and File Return. Each of these work areas includes additional subcategories, allowing users to quickly move to specific information. The program offers a PDF view of a client return, complete with an automated and editable cover letter.

Data entry is intuitive and well organized on streamlined screens. Based on previous data entry, such as whether a filer is single or has no investment income, the system automatically skips areas that are not relevant to the taxpayer. Users can return to information screens and access these screens, if necessary. Prior year data is rolled into current returns and is displayed alongside entries, and calculations are automatically applied for payroll taxes during entry of W-2s.

PTO automatically checks for AMT, includes an MFJ/MFS comparison tool and offers “kiddie tax” compliance in addition to support for amended individual and business returns. The system is designed for e-filing, with no additional charges, and provides a quick return status function on the main toolbar. The diagnostics engine checks for missing or potentially inconsistent information, and also provides additional feedback on possible tax planning strategies. 4.25

Paperless Workflow

Since PTO is a completely web-based system, the program is also inherently paperless, with all returns available directly as a PDF and able to be encrypted and emailed from the system. Unfortunately, it still lacks some of the paperless workflow tools becoming more popular in the market, such as scan, organize and populate functions, as well as direct 1098 import, which are available to users of Intuit’s ProSeries through the ProLine Tax Import add-on. The developers anticipate adding these features soon.

Preparers can attach notes to returns, and all data is stored on Intuit’s secure servers. The program does not offer the ability to store additional engagement documents, such as scanned materials, nor does it provide client portals for sharing, collaboration, and client download and upload of data. Aside from the PDF output, it doesn’t provide other document management functions such as tickmarks or cross-referencing/linking functions. The system does offer an automatically generated client instruction/cover letter.

The new multi-user capabilities in PTO allow for virtually any number of active preparers, who each can access the system from their own locations. Security features limit the system to authorized users, but there is no mechanism for assigning/limiting users to specific clients or client groups. 2.5

Integration

The TY 2010 version of PTO offers prior-year data rollover as well as no-cost data conversion from most competing products. The system lacks the ability to import from accounting software programs, including Intuit’s QuickBooks system. The program does offer an integrated asset depreciation calculation engine and fully shares data throughout returns, although import of K-1s into individual returns from business returns is not yet supported.

PTO does not offer trial balance or broader engagement management utilities, nor does it have a separate tax planning system. But its ability to manage multiple same and prior year returns for clients allows for copying returns and manipulating data as a means of basic scenario planning. While the system does not include integrated tax research or even full form instructions, some guidance is offered through the diagnostic utility, and preparers can easily access the Intuit Live Community, an online forum where professionals can interact with each other to share strategy, research and advice.

The program does not offer an integrated billing system, although it does allow status tracking of client engagements based on whether they have made payment or other factors. Since the system provides PDF copies of returns, it can be used with any third-party document management or storage system. PTO includes integration with third-party bank services through Refund Advantage for RALs and or other refund loan products, but does not directly offer electronic payment acceptance outside of loan proceed deductions. Most of these features are available in other Intuit offerings, so they are likely to be offered in the near future. 2.5

Help/Support

ProLine Tax Online offers two core assistance tools in its Help utility and link to the previously mentioned Live Community. The program’s Help system is actually a link to Intuit’s online support and resource center, which includes FAQs, tips, videos and tutorials, as well as search options. The web-based program is fairly simple to use and does not have extensive manuals or print-ready documentation. No annual update courses or CPE-eligible educational courses are offered related to the PTO system.

Live chat-based support is included free, but Intuit does not offer dedicated live telephone support for the PTO product, as it does for ProSeries and Lacerte. All support staff are located in the United States. During tax season, chat-based support is available Monday through Friday, 5:00 a.m. to 7:00 p.m. (PT) and Saturdays from 8:00 a.m. to 3:00 p.m. Support times are extended until 10:00 p.m. during the last week of tax season. Since the program is web-based, all program updates are performed automatically by the vendor, and users are alerted to system messages via a panel on the work screen. 4.25

Executive Summary & Pricing

ProLine Tax Online is an exceptionally easy-to-use and affordable tax compliance system and, with the addition of support for all business entities and state filing, is suited to professionals who want the benefits of a completely web-based system with no updates or IT headaches. The program is best suited toward returns with lower complexity levels, and it still lacks many popular workflow features, such as scan, organize and populate functions. PTO has no startup costs, allowing preparers to actually use the live and fully featured system (minus actual filing) for free before they purchase it. It can be used on a per-return basis at $29.99 per individual return ($39.99 for business entities), which includes all federal, state and multi-state electronic filings. Pre-paid return bundles can also be purchased, with 20- and 50-return options costing $299 and $499 respectively, thereby dropping per-return costs to as low as $9.99. There is no additional charge for multiple users; any number of preparers and staff can actively work in the system.

The program’s pricing and feature set makes it best suited to smaller practices, including sole practitioners who want a professional tax compliance system that costs nothing and requires no IT assistance to start up. It has a very simple interface that guides users through data entry, and can be accessed from anywhere at any time. Firms can also add staff at any time and with no additional costs. It is not well-suited to firms with more complex client engagements that require extensive collaboration between professional staff during preparation and review processes.